Transfer Pensions Abroad

Habib2342

Hello,

Need some advice on my mother's finances.  She wants to go back home and retire. She has 3 pensions, one state, one with NHS and one with Canada Life. Will she be able to receive payments abroad and what, if any are the tax implications  as all these pensions have been taken out in the UK ? 

thanks,

molerat

Yes she will be able to get them paid outside of the UK, there may be some hoops to jump through with CL though.  The tax implications depend on the country of residence and whether or not they have a tax agreement with the UK.

MallyGirl

make sure that she retains a UK bank account as there have been reports of challenges when that doesn't happen

Habib2342

will dwp, nhs and CL be able to advise of tax implications or should I speak to a tax advisor ?

So can she arrange to receive payments into a foreign account  from these 3 pensions ? why would she need a UK bank account if they've all agreed to redirect payments into a foreign bank account. 

Silvertabby

The LGPS and AFPS both pay direct to an overseas account, so see no reason why the NHS can't/won't do that as well.

 

MallyGirl

it is more likely an issue for DC pensions

Marcon

Habib2342 said:

will dwp, nhs and CL be able to advise of tax implications or should I speak to a tax advisor ?

So can she arrange to receive payments into a foreign account  from these 3 pensions ? why would she need a UK bank account if they've all agreed to redirect payments into a foreign bank account. 

They certainly won't be able to advise of tax implications.

Check with CL whether they will pay her particular type of pension to an overseas bank account.

Beware using the word 'transfer' which has a particular meaning in pensions. You are only talking about having her pensions paid when she has moved out of the UK, not actually moving (transferring) anything, from the sound of it.

Habib2342

so what happens to her self assessment tax return ? does that still need to be filed every year in the uK ?

SmokeysTravels

I’m assuming your mother is being paid a lifetime pension annuity from Canada Life. If this is the case, contact them and provide the overseas bank details where your mother wants those payments to go to. They will need the banks BIC and IBAN numbers. Depending on where the bank is based they will either convert into the relevant local currency or send in GBP and the conversion will be done by the local bank. You need to check how much this conversion will cost- sometimes the bank charges a conversion fee. With regards to tax, Canada Life will deduct tax based on the UK tax code HMRC provides it with. However, you should contact a local tax adviser in the country your mother is moving to see if there is any further tax to pay. Some countries have a double taxation agreement with the UK, and if this is the case she shouldn’t be taxed twice on the same payment. 

Habib2342

or what if she does nothing and accesses her payments from her pension via ATMs abroad ?

Hoenir

Habib2342 said:

or what if she does nothing and accesses her payments from her pension via ATMs abroad ?

Her bank may well freeze the account due to unusual behaviour. Be a red flag that the account is being operated from abroad. 

The income will be need to be declared where she is tax resident. Irrespctive of any UK implications. 

Proper planning needs to be undertaken if she plans to return home. Otherwise there's going to be a huge amount of self inflicted grief.